Angus Partners LLC et al v. Walder et al

Filing
90

OPINION AND ORDER re: 58 LETTER MOTION for Extension of Time to file Memorandum of Law in Opposition to Motion for Summary Judgment and Cross-Motion for Summary Judgment addressed to Judge Analisa Torres from Harley Schnall dated 01/27/2 014 filed by Angus Partners LLC, 75 MOTION for Partial Summary Judgment (Re-filed with Corrected Notice of Cross-Motion) filed by Angus Partners LLC. As set forth within, Defendants' motion for summary judgment is GRANTED. Plaintiffs' cross-motion is DENIED. The Clerk of Court is instructed to terminate the motions at ECF Nos. 58 and 75 and close the case. SO ORDERED. (Signed by Judge Analisa Torres on 9/16/2014) (ajs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ANGUS PARTNERS LLC d/b/a Angus Energy and
WHITE CRANE MARTIAL ARTS, INC., individually
and on behalf of all others similarly situated,
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
DATE FILED: 1 I /(o j;'{
I
I
Plaintiffs,
-againstJAY WALDER, individually and in his
official capacity, JAMES FERRARA,
individually and in his official capacity,
METROPOLITAN TRANSPORTATION
AUTHORITY and TRIBOROUGH
BRIDGE AND TUNNEL AUTHORITY
d/b/a METRO PO LIT AN TRANSPORTATION
AUTHORITY BRIDGES & TUNNELS,
11 Civ. 0039 (AT)
OPINION
AND ORDER
Defendants.
ANALISA TORRES, District Judge:
Plaintiffs, Angus Partners LLC d/b/a Angus Energy ("Angus Energy") and White Crane
Martial Arts, Inc. ("White Crane") bring this action under 42 U.S.C. § 1983 against Defendants,
the Metropolitan Transportation Authority (the "MTA"), the Triborough Bridge and Tunnel
Authority (the "TBTA"), Jay Walder, the Chairman and CEO ofthe MTA, and James Ferrara,
the Acting President of the TBTA, alleging that their bridge and tunnel tolls violate the
constitutionally-protected right to travel and the dormant Commerce Clause. 1 Plaintiffs also
assert common law claims under New York law for unjust enrichment and for money had and
received. Defendants move and Plaintiffs cross-move for summary judgment pursuant to Rule
56 of the Federal Rules of Civil Procedure. For the following reasons, Defendants' motion is
GRANTED, and Plaintiffs' cross-motion is DENIED.
1
Although the case caption states that Plaintiffs bring this action "individually and on behalf of others similarly
situated," the representative plaintiffs have decided not to file a motion for class certification and pursue their claims
only on their own behalf. Joint Status Letter at 2, ECF No. 44.
BACKGROUND
I.
Overview ofthe MTA and the MTA Transportation Network
The MTA operates "North America's largest transportation network" and provides
transportation services across New York City (the "City") and the greater metropolitan area.
Herzog Decl. Ex. 1 (The MTA Network), ECF No. 50-1. The MTA is a public-benefit
corporation and was chartered by the New York State Legislature in 1965. Id. In 1968, the
MTA was given additional authorization to develop and implement transportation policy for the
greater New York metropolitan area, and the TBTA and the New York City Transit Authority
(the "NYCTA") were placed under the common control of the MTA board of directors (the
"MTA Board"). Herzog Decl. Ex. 9 (Report to Boards ofMTA and TBTA) at MTATBTA-A
2894, ECF No. 50-9; see also N.Y. Pub. Auth. Law§§ 552, 1264. As provided in the
authorizing statute,
[t]he purposes of the [MTA] shall be the continuance, further
development and improvement of commuter transportation and
other services related thereto within the metropolitan commuter
transportation district. . . . It shall be the further purpose of the
[MTA], consistent with its status as the ex officio board ofboth the
[NYCTA] and the [TBTA], to develop and implement a unified
mass transportation policy for such district.
N.Y. Pub. Auth. Law§ 1264 (emphasis added). The MTA has the power, among other things, to
set tolls and fares, modify programs and operations, and issue debt to balance its budget and
execute capital plans. See id. at§§ 1265, 1266; Schnall Decl. Ex. M (MTA Board Approves
2009 Budget), ECF No. 77-13.
The MTA transportation network includes the following subsidiaries and affiliates: (1)
the MTA Bus Company ("MTA Bus"), a subsidiary ofthe MTA, which was created in 2004 and
provides bus service in areas formerly served by seven private bus companies; (2) the Long
2
Island Railroad (the "LIRR"), a subsidiary ofthe MTA and a commuter railroad with eleven rail
lines; (3) the Metro-North Railroad (the "MNR"), a subsidiary of the MTA and a commuter
railroad with three major lines serving New York City's northern suburbs; (4) the MTA Capital
Construction Company (the "MTACC"), a subsidiary ofthe MTA, which manages "megaprojects, including major system expansions and Lower Manhattan transit projects"; (5) the
NYCTA, an affiliate ofthe MTA, which operates the New York City subways, the Staten Island
Rapid Transit Operating Authority (the "SIRTOA"), and more than 200 bus routes not operated
by MTA Bus; 2 and (6) the TBT A, an affiliate of the MTA, which owns and oversees the
operation of nine toll bridges and tunnels within the City. Herzog Decl. Ex. 1 (The MT A
Network); Herzog Decl. Ex. 2 (Expert Report of Mitchell L. Moss, Ph.D. (the "Moss Report"))
at 6, 31, ECF No. 50-2. In addition, prior to 2012, the Long Island Bus Company (the "LIB"),
which provides bus service primarily within Nassau County, was operated by the MTA pursuant
to an agreement with Nassau County. Herzog Decl. Ex. 3 (Deposition Transcript of Hilary Ring
("Ring Tr.")) at 44, ECF No. 50-3. The MTA also operates the "Arts for Transit" program,
which displays artwork throughout the MTA network, and the NYCTA operates a "Student
MetroCard" program, which provides free and discount bus and subway fares to students. See
id. at 8; Herzog Decl. Ex. 4 (Deposition Transcript ofDouglas Johnson ("Johnson Tr.")) at 2325, 69-70, 104-06, ECF No. 50-4. Together, the transportation services provided by the MTA
transportation network extend across a portion of twelve counties in southeastern New York and
two counties in southern Connecticut. Def. Resp. Pl. 56.1
~
1, ECF No. 83.
In 2012, the total ridership on MTA public transportation was 2.6 billion, and more than
more than 282 million vehicles used TBTA bridges and tunnels. Herzog Decl. Ex. 1 (The MTA
2
More precisely, the NYCT A operates bus lines with its subsidiary, the Manhattan and Bronx Surface Transit
Operating Authority.
3
Network). The 2012 total operating budget of the MTA was approximately $12.6 billion,
Herzog Decl. Ex. 20, ECF No. 50-20, and the total operating budget for 2013 was $13.2 billion.
Herzog Decl. Ex. 1 (The MTA Network). In 2012, MTA Bus had an annual ridership of
approximately 120.9 million with an average weekday ridership of390,685, and its 2013
operating budget was $661.8 million. I d. In 2012, the LIRR had an annual ridership of
approximately 81.8 million with an average weekday ridership of285,082, and its 2013
operating budget was $1.7 billion. !d. In 2012, the MNR had an annual ridership of
approximately 83 million and average weekday ridership of 281,331, and its 2013 operating
budget was $1.4 billion. Id. The 2013 operating budget ofthe MTACC was $35.2 million.
Moss Report 32. In 2012, NYCTA subway and buses had an annual ridership of2.3 billion with
an average weekday ridership of7,579,555, and the 2013 operating budget ofNYCTA's
subways and buses was $9.9 billion. Herzog Decl. Ex. 1 (The MTA Network). The SIRTOA,
which is also operated by the NYCTA, has an annual ridership of 4.4 million with an average
weekday ridership of 15,993, and its 2013 operating budget was $53.7. Id. In 2012, TBTA saw
more than 282 million vehicle crossings over its bridges and tunnels with average weekday
crossings of798,117, and its 2013 operating budget was $586.5 million. Id. "[Four] of every
[five] rush-hour commuters to New York's central business districts (CBDs) 3 take mass transit."
Moss Report 5.
In addition to the MTA, a number of other state and local public entities provide
transportation services and maintain bridges, roads, and tunnels in the greater New York
metropolitan area. See Schnall Decl. Exs. C-K, ECF Nos. 77-3-77-11. The New York City
Department of Transportation, for example, operates the Staten Island Ferry and a number of
3
New York's CBD is defined as Manhattan south of 60th Street. Herzog Dec!. Ex. 9 (Report to Boards ofMTA and
TBTA) at MTATBTA-A 2887.
4
bridges and tunnels connecting Manhattan with the surrounding boroughs. See Schnall Decl.
Exs. B, D, ECF Nos. 2, 4. There are other public authorities, such as the New York State
Thruway Authority and the New York Bridge Authority, which operate bridges and tunnels in
the City. See Schnall DecI. Exs. G, H, ECF Nos. 77-7, 77-8. Across the larger New York
metropolitan area, the majority ofbridges and highways, both tolled and non-tolled, are operated
by public entities with no affiliation or subsidiary relationship to the MT A or TBT A. See
Schnall Decl. Schnall Decl. Exs. D, I-K, ECF Nos. 77-4, 77-9-77-11.
II.
The TBTA
A. History and Legislative Overview ofthe TBTA
The TBTA, also referred to as MTA Bridges & Tunnels, was created by New York State
in 1933 as a public-benefit corporation to construct the Triborough Bridge. Moss Report 25;
Herzog Decl. Ex. 1 (The MTA Network). Originally chaired by Robert Moses, the TBTA was
authorized to collect tolls, which allowed it to be self-supporting and to finance the bridge's
construction. Moss Report 25. Under Moses' control, the TBTA had considerable autonomy to
finance additional capital projects and to construct bridges, tunnels, roads, and other
infrastructure in the City. Id. at 25-26. Moses, who created several other authorities (including
the Henry Hudson Parkway Authority, the Marine Parkway Authority, and the New York City
Parkway Authority) and oversaw numerous construction projects, consolidated these authorities
into the TBTA in 1940. !d. In 1946, the TBTA merged with the New York City Tunnel
Authority. Id. at 25. Following this merger, all ofNew York's bridge and tunnel authorities
were consolidated into a single entity under Moses' control. !d.
In 1968, the New York State Legislature passed legislation converting the TBTA into an
MTA affiliate and placing the TBTA under the common control of the MT A Board, "effectively
5
ending Robert Moses' reign." Id. at 26; see also N.Y. Pub. Auth. Law§ 1264. This legislation
granted the MT A the authority to use the TBT A's surplus revenues in furtherance of the MT A's
mission to "develop and implement a unified mass transportation policy for [the metropolitan
commuter transportation district]." Id.; see also Moss Report 26. Subsequent legislation
required the transfer of "twenty-four million dollars plus fifty percentum of the balance of [the
TBTA's] operating surplus to the [NYCTA]" and specified that "the remainder shall be allocable
to [the MTA] on behalf of the commuter railroads operated by it, by its subsidiary corporations
or by others under joint arrangements." N.Y. Pub. Auth. Law§ 1219-a(2)(B); see also Moss
Report 26. TheN ew York State Legislature has since given the MTA additional authority to use
TBTA surplus revenues to pay debts on behalf of the MTA and the NYCTA, to fund capital
projects, and to address critical transportation needs. Id.; see also N.Y. Pub. Auth. Law §§
552(2), 553(9), (12), (17), 569-c, 1219-a, 1269, 1270-d. This has enabled the MTA to issue
bonds backed by TBTA revenues (including future toll revenues), which "continues to be
essential for regional mobility by supporting transit, bridges, and tunnels." Moss Report 26. The
MTA Board is required by law to balance the MT A's budget and to close its budget deficit. See
Schnall Decl. Ex. M (MTA Board Approves 2009 Budget). The MTA Board continues to set
TBTA and NYCT A tolls and fares, modify operations throughout the MTA network, and issue
debt in furtherance of that objective. See id.; N.Y. Pub. Auth. Law§§ 1265, 1266.
B. TBTA Facilities and Tolls
The nine toll bridges and tunnels currently operated by the TBTA are the Robert F.
Kennedy Bridge (formerly, the Triborough Bridge), the Throgs Neck Bridge, the VerrazanoNarrows Bridge, the Bronx-Whitestone Bridge, the Henry Hudson Bridge, the Marine ParkwayGil Hodges Memorial Bridge, the Cross Bay Veterans Memorial Bridge, the Queens Midtown
6
Tunnel, and the Hugh L. Carey Tunnel (formerly, the Brooklyn Battery Tunnel). N.Y. Pub.
Auth. Law§§ 553; Herzog Decl. Ex. 1 (The MTA Network). In 2012,282.8 million vehicles
travelled across the bridges and tunnels owned and overseen by the TBT A. The TBT A has 1,545
employees. Id.
As of March 3, 2013, the tolls charged by the TBTA are as follows: the toll to cross the
Marine Parkway-Gil Hodges Memorial and Cross Bay Veterans Memorial Bridges is $3.75; the
toll to cross the Henry Hudson Bridge is $5.00; and the toll to cross each of the remaining
bridges and tunnels is $7.50. Moss Report 30-31. The $15.00 round-trip toll on the VerrazanoNarrows Bridge is only collected one-way, as required under federal law. See Herzog Decl. Ex.
5 (Crossing Charges), ECF No. 50-5. The TBTA also accepts tokens as payment for access to
certain bridges, and these tokens are sold in prepaid books or rolls. !d. Drivers paying with
tokens pay $2.50 rather than $3.75 to cross the Cross Bay and Marine Parkway Bridges. Id.
Drivers who are customers ofthe New York E-ZPass Customer Service Center ("NYCSC
E-ZPass") are eligible for lower toll rates than non-customers. See id; Moss Report 30 n.1 08.
NYCSC E-ZPass customers are charged a $2.00 toll to cross the Marine Parkway-Gil Hodges
Memorial and Cross Bay Veterans Memorial Bridges; $2.44 to cross the Henry Hudson Bridge;
and $5.33 each way to cross each of the remaining TBTA bridges and tunnels. Herzog Decl. Ex.
5 (Crossing Charges); see also Moss Report 30-31. The $10.66 NYCSC E-ZPass round-trip toll
on the Verrazano-Narrows Bridge is only collected one-way. See Herzog Decl. Ex. 5 (Crossing
Charges). "Anyone, regardless of residency, can apply for a New York Customer Service
Center-issued E-ZPass tag." Id.
The TBT A is a member agency in the E-ZPass Interagency Group, which provides toll
collection systems in fourteen states. See id. Prior to 2009, the MTA and TBTA offered
7
discounted rates to all vehicles using an E-ZPass transponder irrespective of whether the
transponder was obtained through the NYCSC or from another agency in another state. Schnall
Decl. Ex. II (Deposition Transcript ofDore Abrams ("Abrams Tr.")) at 47-48, ECF No. 73-35.
In 2009, the MTA and TBTA implemented a toll increase which eliminated the discounts on all
non-NYCSC E-ZPasses but kept in place discounts for customers who pay tolls using an
NYCSC E-ZPass. !d. Dore Abrams, the director of the operating budget at the TBTA, testified
that this change was implemented after the MTA became aware that "other agencies in other
states that had their own customer service center weren't offering the lower toll to [NYCSC] tag
holders." Id. at 48. Abrams testified that the decision was made at the "MTA level" and that
"the people I work for felt that it was a legitimate way of increasing revenue and maintaining
consistency with the other agencies." Id. at 49.
Residents of Staten Island are eligible to receive additional discounts on the VerrazanoNarrows Bridge, and residents of the Rockaways and Broad Channel are eligible to receive
additional discounts and State-funded rebates on the Marine Parkway-Gil Hodges Memorial and
Cross Bay Veterans Memorial Bridges. See Moss Report 31. On the Verrazano-Narrows
Bridge, the discount toll for residents of Staten Island paying by token is $8.53, and the NYCSC
E-ZPass rate is $6.00. Herzog Decl. Ex. 5 (Crossing Charges). On the Marine Parkway-Gil
Hodges Memorial and Cross Bay Veterans Memorial Bridges, the discount toll for residents of
Rockaway and Broad Channel paying by token is $1. 79, and the NYCSC E-ZPass rate is $1.31.
!d. The constitutionality of the differential residence-based tolls charged on these bridges was
recently recognized by the Honorable Paul A. Engelmayer in Janes v. Triborough Bridge &
Tunnel Auth., 977 F. Supp. 2d 320 (S.D.N.Y. Oct. 16, 2013).
8
III.
TBTA Budget and Revenue Transfers
In 2013, the TBTA had an operating budget of$586.5 million, and approximately $936.8
million in surplus TBT A revenues were transferred to support mass transit services. Herzog
Decl. Ex. 1 (The MTA Network). Defendants submit TBTA's financial statements for the year
2011, which provide additional detail as to how the TBTA's surplus revenues are reallocated
among the MT A and its affiliates. See Herzog Decl. Ex. 7 (Financial Statements as of & for the
Years Ended December 31,2011 and 2010) at 10-12, ECF No. 50-7. In 2011, the TBTA had
operating expenses of $512 million and generated revenues of $1.516 billion, yielding an income
of$1.004 billion. Id. at 12. Pursuant to the statutory framework described above, in 2011, the
TBTA provided approximately $528 million of its operating surplus to support mass transit and
commuter rail, with approximately $202 million going to NYCTA and $326 million to the MTA
to support the LIRR and MNR. Id.; Herzog Decl. Ex. 8 (Feb. 6, 2012 Staff Summary) at V-1,
ECF No. 50-8. In 2011, TBTA also provided $85,100 in investment income to the MTA, id.,
and made debt payments of approximately $280 million on NYCTA's behalf and $132 million
on MTA's behalf. Id. at V-10.
Because the portion ofTBTA revenue allocated to the MTA is used for commuter
railroads, not all ofMTA's programs receive surplus funds transferred from the TBTA. MTA's
operating deficits are funded through taxes, such as the mortgage recording taxes and payroll
mobility taxes. See Johnson Tr. at 92-1 04; Herzog Decl. Ex. 14 (Funding Sources of MTA
Headquarters Operating Deficit), ECF No. 50-14. The operating budgets of the MTA Arts for
Transit program, the SIRTOA, MTA Bus, and the LIB are funded through the MTA or, in some
cases, by the City, and, based on the testimony ofMTA's budget director, Douglas Johnson, no
money from the TBTA goes to fund these programs. See Johnson Tr. at 104-11, 136-37.
9
Defendants also submit evidence that the cost to NYCTA ofthe Student MetroCard program is
primarily foregone revenue, rather than out-of-pocket expenditures, because "the vast majority of
the expense toward the operation that is utilized by the students exists already." Johnson Tr. at
24-25, 69-70; see also Ring Tr. at 38-39. State and City subsidies offset some ofthe cost ofthe
Student MetroCard program. Johnson Tr. at 25, 69-72.
IV.
The Relationship Between Public Transit and Usage ofTBTA Facilities
Defendants submit two expert reports addressing, among other things, the relationship
between public transit and the usage of bridges, tunnels, and roadways in the metropolitan area.
Plaintiffs have not offered expert testimony or reports that would contest the conclusions
presented by Defendants' experts, nor have they challenged the qualifications of Defendants'
witnesses to testify as experts.
The report prepared by Mitchell L. Moss, Ph.D., a professor ofUrban Policy and
Planning at New York University, addresses the relationship between mass transit and the use of
bridges and tunnels in the region. See Moss Report 2, 7. Professor Moss begins his report by
providing historical background on the MT A and its various subsidiaries and affiliates and by
describing the historical relationship between the City's mass transit and bridge and tunnel
services. See id. at 7-34. Relevant portions of the report have been cited in the MTA and TBTA
background sections above. See supra Sections I, II.A. Professor Moss notes throughout his
report that New York's policymakers explicitly created the MTA to develop and implement a
uniform mass transportation policy for the region. See Moss Report 5, 7, 26, 42.
The Moss Report also examines the relationship between the transportation services
provided by the MTA and the regional economy and concludes that "a well-funded public
transportation system provides benefits both to travelers who use public transportation and
10
drivers who are able to travel via bridges and tunnels and connected roadways that are not
burdened by the millions of travelers each day who are not on those roads because of mass
transit." !d. at 2-3. In support ofthis conclusion, Professor Moss cites, among other things, a
2012 MTA Report showing that a ten percent shift from transit to automobile would add 5,500
additional cars daily on bridges to Manhattan and that a similar shift in the "Brooklyn/Queens
corridor" would result in "rush-hour congestion levels ... in both directions all day and night."
!d. at 43. The report also provides evidence that, historically, capital investments in the mass
transit and commuter rail systems have benefited users of the TBTA bridges and tunnels by
reducing congestion and providing more attractive transportation options to individuals who
might otherwise choose to drive. Id. at 43---45.
Relevant to this analysis, Professor Moss also considers the impact that an environmental
crisis may have on a transportation system and describes what Superstorm Sandy revealed about
the complex relationship between various parts ofNew York's transportation network. !d. at
· 57-70. Professor Ross' report states that the interdependencies between New York's mass
transit services and its bridges and tunnels "were never more evident" than during the days
following Superstorm Sandy. See Moss Report at 64-65. Professor Moss writes that "without
the subways and commuter railroads operating normally, major arteries leading to Manhattan
were jammed and city streets were in gridlock." Id. Although public agencies were able to
mitigate congestion by creating bus-only and high-occupancy vehicle lanes on several TBT A
bridges, survey results nonetheless showed that commuting times by private car "nearly tripled."
Id. at 67-68. Professor Moss explains that this occurred because "[t]hose who tried to travel by
car encountered massive traffic jams because of increased traffic resulting from the many people
who would normally travel on the subway or commuter rail systems instead travelling by car."
11
Id. at 69. Professor Moss further explains that "[t]he difficulties encountered by automobile
travelers demonstrate how the automobile, commuter rail, and mass transit systems are
functionally interdependent, and how events in one part of the system impact the other parts of
the system." !d.
Beyond the impact on traffic congestion and the relative use of specific facilities, the
Moss Report also recounts how the TBTA tolls themselves motivate would-be motorists to elect
other modes of transportation and thereby benefit the remaining toll-payers by reducing the
number of automobiles at peak hours and by reducing auto emissions. !d. at 43-44. Professor
Moss further notes that the region's unified transportation system enables New York's
businesses to access more talented employees and more customers, permits industries to locate in
close proximity, facilitates face-to-face meetings, overcomes geographic limitations, and
increases productivity. !d. at 45-47. Professor Moss provides the following conclusion
regarding the benefits provided to TBTA toll-payers receive from an integrated transportation
system that includes not only bridges and tunnels, but also mass transit and commuter rail:
The automobiles and trucks that pay the tolls to use TBTA
facilities benefit by having decreased traffic congestion on the
bridges and tunnels and by the increased accessibility for workers
seeking to commute in and through the MTA region. Simply put,
mass transit and commuter rail systems allow workers to get to
places of employment across the region without adding to the
traffic on the roads, bridges and tunnels. Without transit and
commuter rail, the increased congestion would cause lost time,
uncertainty of travel times, increased fuel costs, and stress, which
could affect the quality of life of nearly every resident and business
in the Downstate area.
!d. at 42 (citations and internal quotation marks omitted).
Defendants also submit a report from Kenneth A. Small, Ph.D., an economics professor
at the University of California, Irvine. Herzog Decl. Ex. 6 (Expert Report of Kenneth A. Small
12
(the "Small Report")) at 1, ECF No. 50-6. Professor Small's report was prepared as a response
to the question of whether the tolls charged by the MTA and TBTA are commensurate with the
economic benefits provided. See id. The report describes, among other things, how toll prices
and the price of public transit affect the transportation decisions of individuals who have the
option of commuting by car. See id. at 8-15. Specifically, Professor Small states that:
Raising bridge or tunnel tolls causes a small but measurable
decrease in use of those bridges and tunnels. Some of this
reduction represents diversion to unpriced crossings, which shifts
congestion from the priced to the unpriced crossing; while some
represents diversion to public transportation, which reduces the
overall use of bridges and tunnels, thereby reducing congestion.
!d. at 13. Professor Small observes that without New York's mass transit network, "the road
facilities would be overwhelmed by demand far exceeding their capacities." !d. at 20. The
Small Report also addresses the impact of an integrated transportation system on the economic
vitality ofthe New York metropolitan area. See id. at 20-21. Professor Small writes that "users
of the bridges are receiving the benefits of the regional agglomeration in theN ew York region,
made possible by the integrated transportation system that the bridges and tunnels are part of."
!d. Among the benefits of agglomeration he cites are "increased economic activity, including
wage rates" and the "enormous cultural and other benefits available (and in some cases, only
available) in the New York region." !d.
Defendants also submit a report prepared the MT A and the TBTA in connection with
proposed toll changes in October 2010, which states that "[g]iven the interdependence of the
highway and transit networks, a decline in transit service quality can be expected to result in
increased use of the already over-burdened highway network, without any practical means to
provide additional road capacity." Herzog Decl. Ex. 9 (Report to Boards ofMTA and TBTA) at
MTATBTA-A 2889. The same report documented how the 2005 New York City transit strike
13
resulted in other transportation providers having to make adjustments in services and noted the
"interdependency between MTA transit and bridge & tunnel facilities." !d. at MTATBTA-A
2891-92. The report stated, "[i]n conclusion, the interdependency between MTA transit and
bridge & tunnel facilities remains as vital as ever." !d. at MTATBTA-A 2893.
V.
This Action
Angus Energy is a Florida corporation that provides professional services to businesses in
the home heating industry. Baratz Decl. ,-r,-r 2, 3, ECF No. 67. Employees of Angus Energy,
including its president, Phillip Baratz, travel regularly to New York for business meetings. !d. ,-r
4. While in the New York City area, employees of Angus Energy travel to and from the airports,
business meetings, and places of accommodation primarily by "motor vehicles equipped with an
electronic transponder." !d. ,-r 5. One or more ofthe transponders used by Angus Energy
employees and paid for by Angus Energy was an E-ZPass that is linked with an NYCSC
account. !d. ,-r,-r 7-8. Others were "associated with PlatePlass [sic], a third party vendor that
provides transponders for rental car fleets," and were also paid for by Angus Energy. !d. ,-r,-r 910. One New Jersey-based employee of Angus Energy "regularly used TBTA facilities while on
Angus Energy business, paying with his own E-ZPass transponder and account issued by the EZPass New Jersey Customer Service Center." !d. ,-r 11. Those charges were also reimbursed by
Angus Energy. Id. ,-r 12. Baratz testified that when using TBTA facilities he was aware of
alternate routes but that he personally would elect a more "convenient" or "easy" tolled route
over a free one when going to appointments. Herzog Decl. Ex. 21 (Deposition Transcript of
Philip Baratz) at 50-52, 56-57, ECF No. 50-21.
White Crane is a New York corporation, Compl. ,-r 6, and all officers and employees of
White Crane are based in New York. Herzog Decl., Ex. 22 (Deposition Transcript ofEdgar
14
Kelen ("Kelen Tr.")) at 5, 11-12, ECF No. 50-22. Edgar Kelen, President ofWhite Crane,
frequently uses TBTA crossings in traveling for work-related reasons "because these provide the
most direct route to my destinations" and, on occasion, as a way to avoid traffic. Kelen Decl. ~
6, ECF No. 71; see also Kelen Tr. at 20-29, 89-90. White Crane bears Kelen's work-related
commuting costs. Kelen Decl. ~ 7. When crossing TBTA bridges and tunnels for work, Kelen
occasionally uses a "Fast Lane" transponder, an E-ZPass transponder purchased in
Massachusetts, rather than an NYCSC E-ZPass transponder. Id.
~
8; see also Kelen Tr. 32, 83.
Because Kelen paid TBTA tolls using a Fast Lane transponder, some of the TBTA tolls
reimbursed by White Crane are not eligible for the discount available to customers ofNYCSC EZPass. Kelen Decl.
~
8; see also Herzog Decl. Ex. 5 (Crossing Charges).
DISCUSSION
I.
Legal Standard
In ruling on a motion for summary judgment, all evidence must be viewed in the light
most favorable to the non-moving party, Overton v. NY State Div. ofMilitary & Naval Affairs,
373 F.3d 83, 89 (2d Cir. 2004), and the court must "resolve all ambiguities and draw all
permissible factual inferences in favor of the party against whom summary judgment is sought,"
Sec. Ins. Co. ofHartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 83 (2d Cir. 2004).
Summary judgment is appropriate when the record demonstrates that there are no genuine issues
of material fact in dispute and that one party is entitled to judgment as a matter oflaw. See Fed.
R. Civ. P. 56( a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The movant bears the
initial burden of informing the court of the basis for its motion and must identify those portions
of the pleadings, depositions, answers to interrogatories, and admissions on file that demonstrate
that the moving party is entitled to a judgment as a matter oflaw. See Fed. R. Civ. P. 56(a), (c);
15
Celotex, 477 U.S. at 323. "The moving party is 'entitled to a judgment as a matter oflaw'
because the nonmoving party has failed to make a sufficient showing on an essential element of
her case with respect to which she has the burden of proof." Id.
"The same standard applies where, as here, the parties filed cross-motions for summary
judgment." Morales v. Quintel Entm 't, Inc., 249 F.3d 115, 121 (2d Cir. 2001). "[E]ach party's
motion must be examined on its own merits, and in each case all reasonable inferences must be
drawn against the party whose motion is under consideration." Id. (citations omitted). "[E]ven
when both parties move for summary judgment, asserting the absence of any genuine issues of
material fact, a court need not enter judgment for either party." Heublein, Inc. v. US., 996 F.2d
1455, 1461 (2d Cir. 1993).
Here, there are no genuine disputes of material fact; the parties only disagree about the
application ofthe law to the facts. Def. Mem. 13, ECF No. 49; Pl. Mem. 2, ECF No. 76.
II.
The Right to Travel and the Dormant Commerce Clause
Plaintiffs allege that Defendants' bridge and tunnel tolls violate two distinct provisions of
the U.S. Constitution: the right to travel and the dormant Commerce Clause.
"Courts have long recognized that the Constitution protects a right to travel within the
United States, including for purely intrastate travel." Selevan v. New York Thruway Auth.
( "Selevan II"), 711 F.3d 253, 257 (2d Cir. 2013) (citing Saenz v. Roe, 526 U.S. 489, 500 (1999);
Williams v. Town of Greenburgh, 535 F.3d 71, 75 (2d Cir. 2008)). "Although the Supreme Court
has not felt impelled to locate this right definitively in any particular constitutional provision, it
is variously assigned to the Privileges and Immunities Clause of Article IV, to the Commerce
Clause, and to the Privileges [or] Immunities Clause of the Fourteenth Amendment, as well as
the Equal Protection Clause of the Fourteenth Amendment." Janes, 977 F. Supp. 2d at 332
16
(citations and internal quotation marks omitted).
"A state law implicates the right to travel when it actually deters such travel, when
impeding travel is its primary objective, or when it uses any classification which serves to
penalize the exercise of that right." Atty. Gen. of New York v. Soto-Lopez, 476 U.S. 898, 903
(1986) (citations omitted). Although strict scrutiny will apply to denials of the fundamental right
to travel, "minor restrictions on travel simply do not amount to the denial of a fundamental
right." Selevan v. New York Thruway Auth., ("Selevan F'), 584 F.3d 82, 100-01 (2d Cir. 2009);
see also Evansville-Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707, 714
(1972) ("A permissible charge to help defray the cost of [a state-provided] facility is ... not a
burden in the constitutional sense."). 4 In such circumstances, a district court will apply the threepart standard set forth by the Supreme Court in Evansville and Northwest Airlines. Selevan I,
584 F.3d at 100 (citing Northwest Airlines, Inc. v. Cnty. of Kent, Mich., 510 U.S. 355, 369
(1994); Evansville, 405 U.S. at 716-17).
The Commerce Clause provides Congress with the power "[t]o regulate Commerce ...
among the several States." U.S. Const., art. I, § 8, cl. 3. "The negative or dormant implication
of the Commerce Clause prohibits state taxation or regulation that discriminates against or
unduly burdens interstate commerce and thereby impedes free private trade in the national
marketplace." Gen. Motors Corp. v. Tracy, 519 U.S. 278,287 (1997) (internal quotation marks,
bracket alterations, and citations omitted). Under the Supreme Court's dormant Commerce
Clause doctrine, "a statute that clearly discriminates against interstate commerce in favor of
4
Plaintiffs do not contend that the MT A and TBT A policies at issue warrant the application of strict scrutiny. See
Pl. Mem. 6; Pl. Reply Mem. 2, ECF No. 87. To the extent the MT A and TBT A tolls implicate a possible violation
ofthe right to travel, the tolls do not penalize that right and represent only a "minor restriction on travel." Selevan I,
584 F.3d at 101; see also Town of Southold v. Town ofEast Hampton, 477 F.3d 38, 53-54 (2d Cir. 2007); Miller v.
Reed, 176 F.3d 1202, 1205 (9th Cir. 1999). As discussed at greater length below, the record does not support the
conclusion that Defendants' toll policies were motivated by a discriminatory or protectionist purpose. They are
charges "designed only to make the user of state-provided facilities pay a reasonable fee." Selevan II, 711 F .3d at
258 (citation and internal quotation marks omitted). Accordingly, strict scrutiny does not apply.
17
intrastate commerce is virtually invalid per se and can survive only ifthe discrimination is
demonstrably justified by a valid factor unrelated to economic protectionism." Freedom
Holdings, Inc. v. Spitzer, 357 F.3d 205, 216 (2d Cir. 2004). However, "there is a residuum of
power in the state to make laws governing matters of local concern which nevertheless in some
measure affect interstate commerce or even, to some extent, regulate it." Kassel v. Canso!.
Freightways Corp. ofDel., 450 U.S. 662, 669 (1981). Accordingly, courts will distinguish
between policies that "clearly discriminate[] against interstate commerce in favor of intrastate
commerce" and those that "regulate[] evenhandedly with only incidental effects on interstate
commerce." Town of Southold v. Town of East Hampton, 477 F.3d 38, 53-54 (2d Cir. 2007)
(citing Freedom Holdings, 357 F.3d at 217-18). The Second Circuit recently held that in
addressing a dormant Commerce Clause challenge to toll rates, a district court should undertake
the analysis set forth by the Supreme Court in Evansville and Northwest Airlines. See Selevan I,
584 F.3d at 96-98.
A levy or toll is permissible-and not a violation of either the right to travel or the
dormant Commerce Clause-if it "(I) is based on some fair approximation of use of the
facilities, (2) is not excessive in relation to the benefits conferred, and (3) does not discriminate
against interstate commerce." Northwest Airlines, 510 U.S. at 369 (citing Evansville, 405 U.S. at
716-17). 5 The third prong, whether a toll discriminates against interstate commerce, is a
"threshold inquiry" and if a policy survives this prong it will "have a comparatively easier time
passing constitutional muster." Selevan I, 584 F.3d at 94. Accordingly, the Court will address
each of the Northwest Airlines factors in tum, beginning with the threshold question of whether
the tolls discriminate against interstate commerce.
5
Where strict scrutiny is not warranted, the analysis for a right to travel and dormant Commerce Clause claim are
identical. See Janes, 2013 WL 5630629, at * 14 ("[W]ith strict scrutiny held inapplicable, the two inquiries
collapse."); see also Selevan I, 584 F.3d at 98, 102.
18
A. Discrimination Against Interstate Commerce
"[A] state regulation 'discriminates' against interstate commerce only if it 'impose[s]
commercial barriers or discriminate[ s] against an article of commerce by reason of its origin or
destination out of State."' I d. at 95 (quoting C & A Carbone, Inc. v. Town of Clarkstown, 511
U.S. 383, 390 (1994)). To establish that a regulation or fee is discriminatory, a plaintiff must
"identify an[] in-state commercial interest that is favored, directly or indirectly, by the
challenged statutes at the expense of out-of-state competitors." Selevan I, 584 F.3d at 95
(quoting Grand River Enterprises Six Nations, Ltd. v. Pryor, 425 F.3d 158, 169 (2d Cir. 2005)).
A plaintiff must also identify the out-of-state competitor that is harmed by the toll policy.
Selevan I, 584 F.3d at 95. The Court must direct its inquiry "to determining whether [the policy]
is basically a protectionist measure, or whether it can fairly be viewed as a [policy] directed to
legitimate local concerns, with effects upon interstate commerce that are only incidental." City
ofPhila. v. New Jersey, 437 U.S. 617, 624 (1978); see also Janes, 2013 WL 5630629, at *17.
Once a plaintiff establishes that the policy in question is discriminatory, "the burden shifts to the
government to show that the local benefits of the law outweigh its discriminatory effects and that
the government lacked a nondiscriminatory alternative by which it could protect the local
interests." Town of Southold, 477 F.3d at 47 (citing USA Recycling, Inc. v. Town of Babylon, 66
F.3d 1272, 1281-82 (1995)).
Plaintiffs contend that Defendants' policies discriminate against interstate commerce
because the MTA and TBTA offer lower toll rates to motorists who use a NYCSC E-ZPass than
to motorists who use non-NYCSC transponders, such as those purchased in other states. 6 Pl.
6
Defendants contend that Plaintiffs waived this argument because it was raised for the first time in Plaintiffs'
opposition to Defendants' motion for summary judgment. Def. Reply 19, 20, ECF No. 81. Defendants' contention
19
Mem. 21-22. Plaintiffs argue that this pricing scheme "openly favors transponders and prepaid
transportation accounts from an in-state source and disfavors out-of-state transponders and
prepaid transportation accounts from an out-of-state source." Jd. In support of this position,
White Crane submits evidence that its president paid higher toll rates when using a Fast Lane
transponder purchased in Massachusetts than he would have paid using an NYCSC E-ZPass.
See Kelen Decl. ,-r,-r 7, 8; Schnall Decl. Exs. GG, HH. Angus Energy also submits evidence that it
has borne the commuting costs for employees who paid the non-discounted TBTA toll rates
using a non-NYCSC E-ZPass. See Baratz Decl. ,-r,-r 10, 11. Plaintiffs also contend that the
MTA's purpose in adopting differential rates for non-NYCSC customers is one of"retaliatory
discrimination." See Pl. Mem. 23. Plaintiffs cite the deposition testimony ofDore Abrams, who
stated that prior to 2009 the MT A offered discounted rates to all vehicles using an E-ZPass
transponder regardless of its state of origin, not just those purchased through the NYCSC. See
Abrams Tr. 9, 47--49. Abrams testified that the differential E-ZPass rates were adopted in 2009
because "other agencies in other states that had their own customer service center weren't
offering the lower toll to [NYCSC] tag holders." Jd. at 48. Notwithstanding Abrams' testimony
that "the people I work for felt that it was a legitimate way of increasing revenue and
maintaining consistency with the other agencies," id. at 49, Plaintiffs ask the Court to conclude
that the NYCSC E-ZPass toll discounts are an instance of "those jealousies and retaliatory
measures the Constitution was designed to prevent." See Pl. Mem. 23 (quoting C & A Carbone,
511 U.S. at 390).
is unavailing. As an initial matter, the memorandum in which Plaintiffs articulated this theory of discrimination was
not merely their opposition; it was also Plaintiffs' first memorandum in support of their motion for partial summary
judgment. See Pl. Mem. 1, 2. Moreover, Defendants were on notice that Plaintiffs were alleging that Defendants'
toll prices were discriminatory, Compl. ~~ 110, 115, and the complaint, initially filed as a class action complaint,
also alleged differences between TBT A's base rates and the rates charged to NYCSC E-ZPass customers, see id. ~~
95, 96, 113. Unlike the cases cited by Defendants, the claim here was first asserted in the complaint. The question
of whether the discounts offered to NYCSC E-ZPass customers are discriminatory is properly before the Court.
20
Doran v. Massachusetts Turnpike Auth., 348 F.3d 315, 319-20 (1st Cir. 2003) is
instructive. In Doran, the plaintiffs alleged that toll discounts the Massachusetts Turnpike
Authority offered on certain toll plazas and tunnels in the Boston area to Fast Lane customers,
but not to customers of comparable transponder systems offered in other states, discriminated
against interstate commerce. The plaintiffs in Doran argued that the policy was discriminatory
because a heavier toll burden was imposed on out-of-state residents than on in-state residents.
See id. The First Circuit rejected this argument on three grounds. First, the court concluded that
the policy was not discriminatory because the Fast Lane transponders, and therefore the
discounts, were available to in-state and out-of-state residents alike, noting that "[a]ny traveler
can qualify for a discount but the decision whether to do so turns principally on anticipated
frequency of travel." Id. at 321. The court explained that in-state residents who fail to use a Fast
Lane transponder would also pay the non-discounted rates, concluding "it is expected that
nonparticipants will pay higher tolls but it does not follow that interstate commerce will be
burdened, much less that it will suffer discrimination." Id. Second, the court rejected the
argument that the policy was discriminatory on its face, citing plaintiffs' failure to identify a
competitor and holding that customers of other transponder systems cannot be said to have been
"penalized" given that nothing in the policy prohibits drivers from carrying multiple
transponders. Id. at 322. Finally, the court declined to find a discriminatory or protectionist
purpose and recognized that the stated purpose of benefitting frequent commuters was
constitutionally valid. Id. at 321.
Plaintiffs contend that Doran is inapposite because they are not alleging that the MT A
and TBTA's discount policy discriminates based on residency, but rather that the pricing scheme
involves "discrimination by a state actor between articles of commerce according to the state of
21
origin," i.e., the transponders and accounts that are linked to those transponders. Pl. Reply Mem.
9 (emphasis in original); see also Pl. Mem. 22. Plaintiffs ask the Court to review Defendants'
policy under case law prohibiting states from discriminating against articles of commerce
coming from outside the state and argue that Defendants' policy of charging higher rates when
vehicles use an out-of-state transponder constitutes ''per se discrimination." Pl. Mem. 22-23
(citing C & A Carbone, 511 U.S. at 417); Pl. Reply Mem. 9.
Plaintiffs' attempt to distinguish Doran is unpersuasive. In asking the Court to focus on
the articles of commerce rather than the individuals or entities affected, Plaintiffs fail to satisfy
their burden of identifying an in-state interest that is benefitted or an out-of-state competitor that
is harmed. Selevan I, 584 F.3d at 95; Janes, 977 F. Supp. 2d at 337-38. The Court agrees with
the First Circuit that the payment systems that operate at toll collection points in other states
cannot be said to "compete" with the NYCSC E-ZPass payment system used by Defendants. See
Doran, 348 F.3d at 322. The record here shows that the TBTA is a member of the multistate EZPass Interagency Group, which implements toll collections in fourteen states, see Herzog Decl.
Ex. 1 (The MTA Network), and Plaintiffs submit no evidence of any competition or harm
occurring to the other agencies in this network or to any other competitor. See Selevan I, 584
F.3d at 95. To the contrary, the record indicates that the discount policy was implemented, in
part, to "maintain[] consistency with the other agencies." Abrams Tr. 49. "'Laws that draw
distinctions between entities that are not competitors do not "discriminate" for purposes of the
dormant Commerce Clause."' Selevan I, 584 F.3d at 95 (quoting Town of Southold, 477 F.3d at
49); see also Freedom Holdings, 357 F.3d at 217-18 ("For dormant Commerce Clause purposes,
the relevant 'economic interests,' both in-state and out-of-state, are ... not those ofthe state
itself.") (citations omitted).
22
To the extent that Plaintiffs argue that individuals or businesses with NYCSC
transponders and accounts benefit relative to those lacking such articles, Plaintiffs' position fails
for the same reason articulated in Doran. Any person or business, regardless of residency, can
obtain a NYCSC E-ZPass transponder and thereby receive discounted tolls on TBTA bridges and
tunnels, and there is nothing in the record to suggest that motorists are prohibited from owning
and using more than one transponder. See Herzog Decl. Ex. 5 (Crossing Charges). As in Doran,
the evidence demonstrates that any burden associated with non-discounted tolls falls on in-state
and out-of-state interests alike. Specifically, the record indicates that New York residents who
pay in cash or via a non-NYCSC transponder pay precisely the same tolls as out-of-state
motorists who pay in the same manner, whereas out-of-state motorists who pay the tolls via
NYCSC E-ZPass receive the same discounts as New York residents. Indeed, evidence submitted
by Plaintiffs essentially illustrates this point. Angus Energy, a Florida entity, paid discounted
toll rates associated with an NYCSC E-ZPass, Baratz Decl. ,-r,-r 3, 7-8, whereas White Crane, a
New York entity, paid full-price tolls when its president, a New York resident, used a
Massachusetts Fast Lane transponder. Kelen Decl. ,-r,-r 2-8. Plaintiffs have failed to establish
more than an incidental effect on interstate commerce. 7 See also C & A Carbone, 511 U.S. at
404 (O'Connor, J., concurring) ("[T]he fact that interests within the regulating jurisdiction are
equally affected by the challenged enactment counsels against a finding of discrimination.").
Moreover, the MTA's decision to implement differential toll rates is not evidence of a
retaliatory or protectionist purpose. Contrary to Plaintiffs' characterization, Abrams' testimony
demonstrates that the MT A implemented its differential toll discount policy to maintain
consistency with other agencies with similar policies. Abrams Tr. 48--49. Defendants also
7
The incidental nature of any alleged harm to Plaintiffs is further evidenced by their testimony that Plaintiffs elected
to pay the TBT A's allegedly unconstitutional tolls out of convenience, despite being aware of free alternate routes.
See Baratz Tr. at 50-52, 56-57; Kelen Tr. 20-29, 89-90.
23
submit evidence showing that the pricing policies generally serve to address traffic and
congestion on the bridges and tunnels and target discounts to motorists based on anticipated
frequency ofuse. Small Report 8-15, 18. As other courts have recognized, these are legitimate
local concerns consistent with the Commerce Clause and the right to travel. See, e.g., Town of
Southold, 477 F.3d at 48 (upholding town ferry law as nondiscriminatory based, in part, on
district court's finding that "the law was not motivated by a discriminatory animus but by the
need to address a growing traffic problem in the Town"); Janes, 2013 WL 5630629, at *17
(finding that "alleviat[ing] unique geographic burdens" through residency-based toll discounts
was "a legitimate and non-discriminatory governmental purpose").
Lastly, Plaintiffs' framing of the issue-that the E-ZPass transponder payment systems
are articles of commerce analogous to the waste treatment services at issue in C & A Carbone,
511 U.S. at 390-91, the trucking services in Am. Trucking Ass 'n, Inc. v. Whitman, 437 F.3d 313
(3d Cir. 2006), or the direct shipments of out-of-state wine at issue in Granholm v. Heald, 544
U.S. 460 (2005)-is unpersuasive. The transponder system is, like the tokens accepted by the
TBTA or the MetroCards accepted on MTA buses and subways, a method of payment rather
than a good or service that is transacted in an interstate market. Under Plaintiffs' proposed logic,
the MT A would presumab1 be required to accept transit cards purchased from the Washington
y
D.C. Metro in charging for access to the New York City subways, and the MTA would
presumably have to make available to such customers the same discounts that are offered to
MetroCard customers, even though anyone, regardless of residency, can purchase a MetroCard
and obtain discounts directly from the MTA. This view of discrimination is too sweeping.
Absent a showing of some protectionist purpose or more than an incidental effect on interstate
commerce, the Commerce Clause does not prohibit a state transportation authority from
24
addressing legitimate local concerns through its toll policy or from exercising reasonable
discretion in determining which payment systems to accept in exchange for use of its facilities.
Doran, 348 F.3d at 321-22; see also City ofPhila., 437 U.S. at 624; McBurney v. Young, 133 S.
Ct. 1709, 1720 (2013).
Accordingly, because Defendants' toll policies do not discriminate against interstate
commerce, Defendants have cleared the first hurdle under Northwest Airlines.
B. Fair Approximation ofUse and Excessiveness in Relation to the Benefits Conferred
Plaintiffs take issue with the MTA's policy of allocating TBTA toll revenue surpluses to
fund other programs and facilities operated by the MTA and its subsidiaries and affiliates. See
Pl. Mem. 9-21. Plaintiffs offer essentially two reasons that tolls charged on the TBTA operated
bridges and tunnels do not reflect a "fair estimation of the use of those facilities," id. at 9-12.
Plaintiffs argue that tolls paid by TBTA customers (1) are excessive in relation to the cost of
maintaining the bridges and tunnels, as evidenced by approximately one billion dollars in surplus
revenue collected annually by the TBTA, and (2) are being used to subsidize MTA facilities and
programs unrelated to the operation or maintenance ofthe TBTA bridges and tunnels. Id. at 912. Plaintiffs raise similar concerns in claiming that the tolls collected are "excessive in relation
to the benefits conferred." Id. at 12-21. Plaintiffs complain that surplus TBTA toll revenues are
used to fund unrelated facilities and programs "cobbled together under MT A control," which
provide "no qualifying benefit on TBTA facilities users." Id. at 17-21. Plaintiffs propose that
the Court, rather than taking into consideration the costs and benefits of an "integrated
transportation system," must limit its focus to the costs and benefits of the TBTA bridges and
tunnels, which serve the limited purpose of"allow[ing] people to travel with their vehicles across
certain bodies ofwater." Id. at 10-17.
25
1. Integrated Transportation System
Before reaching the fair approximation and excessiveness prongs under Northwest
Airlines, the Court must first determine which MTA and TBTA facilities are properly within the
scope of its analysis. "[I]fa bridge toll generates more revenue than necessary to provide a fair
profit or rate of return, the toll may not be challenged successfully if it is used to support a single
integrated transportation system in which the successful operation of the bridge is dependent in
whole or part on the operation of the other related facilities." See Molinari v. New York
Triborough Bridge & Tunnel Auth., 838 F. Supp. 718, 725 (E.D.N.Y. 1993). Thus, a threshold
issue for resolving the remaining Northwest Airlines prongs is whether the MTA's network of
transportation services constitutes an "integrated transportation system" from which TBTA tollpayers can be said to benefit and to which TBTA surpluses may be allocated.
Plaintiffs maintain that the MT A and its subsidiaries and affiliates cannot be said to
operate an integrated transportation system, Pl. Mem. 12-17, and argue, in the alternative, that
none of the non-TBTA facilities or programs operated by or affiliated with the MTA should be
credited with conferring a benefit to TBTA toll-payers. See id. at 17-21. In support of their
position, Plaintiffs cite extensive figures and data regarding the costs, routes, and ridership of the
NYCT A, LIRR, and MNR, as well as several other MTA programs, including Arts for Transit,
the Student MetroCard program, MTA Bus, and the LIB. See Schnall Decl. Exs. E, Q-X, ECF
Nos. 77-5, 77-17-77-24. Plaintiffs contend that these MTA facilities and programs, a "hodgepodge of roads and rails," are too far removed from the services provided by the TBTA bridges
and tunnels to be considered part of a single system. See Pl. Mem. 12-17. Plaintiffs also proffer
evidence that there are thousands of miles of roadways, bridges, and tunnels that are not operated
26
by the MTA or TBTA in support of their position that no integrated transportation system exists.
Pl. Mem. 12-13; see also Schnall Decl. Exs. C-K.
Defendants reject Plaintiffs' characterization of the MTA network as an assemblage of
unrelated programs and facilities and urge the Court to conclude that the MTA and TBTA
operate a functionally integrated transportation system. Def. Mem. 17-26; see also Janes, 2013
WL 5630629, at *19-20. Defendants direct the Court to the 1968 legislation that brought the
TBTA and NYCTA under the control ofthe MTA, in which the New York State Legislature
stated that the purpose of the MT A is to "develop and implement a unified mass transportation
policy." N.Y. Pub. Auth. Law§ 1264. Defendants also submit two uncontested expert reports
which provide extensive support for the proposition that the MT A does, in fact, operate a unified
and integrated transit system, and that this system provides substantial benefits to users of the
TBTA facilities in proportion to their use. Specifically, Defendants submit evidence that the
availability of mass transit and commuter railways impacts demand and generally mitigates the
level oftraffic congestion at TBTA-operated bridges and tunnels. Moss Report 42-45; Small
Report at 8-15. Defendants also provide a report detailing how crises such as Superstorm Sandy
reveal the functional interdependencies between bridge and tunnel use and mass transportation.
Moss Report 57-70. The benefits of reduced traffic congestion, which include lower fuel costs,
reduced stress, and more predictable wait times, are conferred to motorists each time they
patronize the TBTA's facilities and avoid traffic that would occur in the absence of functioning
mass transit and commuter rail systems. See id. at 42-43. Moreover, as Defendants' expert
reports further demonstrate, motorists (whether employers, employees, businesses, or
consumers) who use the TBTA's facilities also receive economic benefits from being able to
access the efficiencies and scale of New York City, which are made possible, in part, by the
27
integrated transportation system provided by the MTA and its various subsidiaries and affiliates.
See Moss Report 45-4 7; Small Report 20-21. The economic benefits of this "agglomeration"
identified by Professor Small include "increased economic activity, including wage rates" and
the "enormous cultural and other benefits available (and in some cases, only available) in the
New York region." !d. at 20-21. Professor Moss also identifies economic benefits made
possible by the MIA's transportation network, including an increased flow of people and goods,
expanded access to jobs and workers, increased office capacity, greater proximity of businesses,
and other improvements in productivity stemming from face-to-face interactions. See Moss
Report 45-4 7. Professor Moss concludes that "the services provided by the MTA and its
affiliates and subsidiaries facilitate the movement of people and goods through and between
other parts of the metropolitan area, making possible a density of people and economic activity
throughout the region greater than (and more economically productive than) any other U.S. city
or metropolitan area." !d. at 46.
Although Plaintiffs have shown that the MTA and its subsidiaries and affiliates operate a
number of transportation services across a geographic region spanning the greater New York
City metropolitan area, they have failed to adduce any evidence on the specific question of
whether Defendants' transportation facilities are discrete services or whether the services
function together to constitute an integrated transportation system. Nor does the fact that other
entities also provide access to the City (e.g., the bridges and tunnels operated by the NYC
Department ofTransportation, the New York State Thruway Authority, and the New York
Bridge Authority) support an inference that the MTA and TBTA do not operate an integrated
system. Plaintiffs have not identified a single case in which a court required all means of
transportation in a region to be exclusively operated by a single entity in order to establish the
28
existence of an integrated transportation system. Indeed, in Auto. Club ofNew York, Inc. v. Port
Auth. ofNew York & New Jersey, 887 F.2d 417, 421 (2d Cir. 1989), the Second Circuit upheld a
district court finding that the Port Authority, which operates PATH trains, buses, and several
bridges and tunnels connecting New York and New Jersey, operates "an integrated
interdependent transportation system," even though the Port Authority is not the exclusive
provider of transportation services in the region or between New York and New Jersey. See also
Wallach v. Brezenoff, 930 F.2d 1070, 1071 (3d Cir. 1991). And both Janes, 2013 WL 5630629,
at *19-20, and Molinari, 838 F. Supp. at 726, recognized that the MTA operates an integrated
transportation system, notwithstanding the fact that other means of transportation are available in
the region. Defendants have established that the MTA and TBTA operate an integrated
transportation system that confers substantial benefits on motorists who pay TBTA tolls.
2. Whether Tolls Charged Are Based on a Fair Approximation ofUse
Having determined that Defendants operate an integrated transportation system, the Court
must still address whether the amounts of the TBTA's tolls fairly approximate the costs of use
and are excessive compared to the benefits toll-payers receive. Under the first prong, states and
localities are afforded some flexibility in setting rates "so long as the toll is based on some fair
approximation of use or privilege for use." Evansville, 405 U.S. at 716. Toll rates will satisfy
the fair approximation requirement "even though some other formula might reflect more exactly
the relative use of the state facilities by individual users." Evansville, 405 U.S. at 717. Even if
the tolls charged create a surplus, all that is required is a "functional relationship" between the
toll and the facilities used by the toll's payers. Bridgeport & Port Jefferson Steamboat Co. v.
Bridgeport Port Auth., 567 F.3d 79, 87 (2d Cir. 2009) ("A user fee ... may reasonably support
the budget of a governmental unit that operates facilities that bear at least a 'functional
29
relationship' to facilities used by the fee payers."). Revenue surpluses and corresponding toll
rates are not assessed in isolation, but must be evaluated relative to the costs of the facilities and
to the benefits conferred. See Selevan II, 711 F.3d at 259-60.
"[T]he Northwest Airlines test permits the state to make 'reasonable' exceptions to its fee
schedule, so long as the fee schedule, on the whole, reflects at least 'a fair, [even] if imperfect,
approximation ofthe use of facilities for whose benefit they are imposed."' Selevan I, 584 F.3d
at 97 (citing Evansville, 405 U.S. at 717). For example, in Janes, the court held that the MTA
and TBTA policy of providing toll discounts to residents of Staten Island, the Rockaways, and
Broad Channel on three TBTA bridges did not violate the plaintiffs' right to travel or the
Commerce Clause. 2013 WL 5630629. The court noted that the usage patterns supported
providing volume discounts to users who were "locked in" to certain facilities and would have
heavy transit burdens and rejected the plaintiffs' arguments that nomesidents paid unduly more
for the same access. !d. at 18. "The Northwest Airlines test is not inflexible; it simply requires
'reasonableness."' Selevan I, 584 F.3d at 98.
In evaluating whether Defendants' toll rates reflect a "fair approximation," the Court may
take into consideration costs associated with the facilities that functionally support the TBTA
bridges and tunnels. See Bridgeport, 567 F.3d at 87 (citing Auto. Club, 887 F.2d at 421).
Defendants have demonstrated that a "functional relationship" exists between the various
facilities and programs operated by the MTA and the bridges and tunnels used by the payers of
the TBTA's tolls. Traffic spillover and substitution effects are appropriate considerations in
determining whether a functional relationship exists. See Auto. Club, 887 F.2d at 422; see also
Cohen v. Rhode Island Tpk. & Bridge Auth., 775 F. Supp. 2d 439, 448-49 (D.R.I. 2011).
Defendants' uncontested expert reports establish that the MTA operated transportation network
30
provides motorists with transportation options and serves to reduce congestion on bridges and
tunnels throughout the City. Moss Report 42-45; Small Report at 8-15; Herzog Decl. Ex. 9
(Report to Boards ofMTA and TBTA) at MTATBTA-A 2889-93. Indeed, usage ofMTA mass
transportation and commuter rail services influences TBTA facilities to such an extent that
closures in parts of the system could result in "rush-hour congestion levels ... in both directions
all day and night" on certain TBTA facilities. Moss Report 43. Defendants also submit evidence
that the Arts for Transit program, the Student MetroCard program, MTA Bus, and the LIB all, in
varying degrees, functionally support the TBTA bridges and tunnels by encouraging greater use
of public transportation and thereby reducing traffic. See Johnson Tr. 67; Moss Report 44-45.
Thus, given the substantial evidence that traffic flow on the TBT A bridges and tunnels would
suffer significantly without the MTA's mass transit and commuter railway services, it is not
unfair for the MTA to allocate TBTA surpluses to support these functionally related facilities.
Cf Auto. Club, 887 F.2d at 423.
Plaintiffs observe that "[the] TBTA has annually collected over $1 billion in tolls from
motorists in every year during the relevant period, [sic] and transferred approximately 60% of
those funds- hundreds of millions of dollars- as surplus revenues." Pl. Reply Mem. 6. 8
Plaintiffs contend that "even under an integrated transportation system, the grossness of the
margins, in percentage and absolute terms, cannot be considered even close to being a fair
approximation when the 'discrepancy here exceeds permissible bounds.'" Pl. Reply Mem. 6
(citing Bridgeport, 567, F .3d at 84). Although the TBTA' s operating budget was in the range of
$586.5 million for 2013, the MTA's total operating budget for the same year was $13.2 billion,
8
More concretely, the TBTA's toll revenues in 2011 were $1.516 billion on an operating budget of $512 million.
Herzog Decl. Ex. 7 (Financial Statements as of & for the Years Ended December 31, 2011 and 201 0) at 10-12. Of
that amount, approximately $940 million in TBT A surpluses went to support MT A mass transit and commuter
railway services. See Herzog Decl. Ex. 8 (Feb. 6, 2012 Staff Summary) at V 1-V 10. In 2013, the TBTA operating
budget was $586.5 million and approximately $936.8 million in TBTA surpluses went to support mass transit and
commuter railway services. Herzog Decl. Ex. 1 (The MT A Network).
31
and the operating budgets ofthe NYCTA, LIRR, and MNR were $9.9 billion, $1.7 billion, and
$1.4 billion respectively. Herzog Decl. Ex. 1 (The MTA Network). The standard is one of
"reasonableness," Selevan I, 584 F .3d at 96, 102, and the Court will not substitute its own
judgment for that of the legislature or the managers of the City's transportation system. In light
of the substantial operating and maintenance costs and the demonstrated functional
interdependencies, it does not offend notions of reasonableness or fairness that TBT A surpluses
in the range of $940 million are allocated to support related facilities within the same integrated
transportation network. See Molinari, 838 F. Supp. at 725; Auto. Club, 887 F.2d at 421-22. Nor
does the fact that tolls are assessed on a per-trip basis render the toll burden unfair. See Doran,
348 F.3d at 319-21; Janes, 2013 WL 5630629, at *18. Although a more exacting formula might
correspond more accurately to the cost of operating the bridges and tunnels and the functionally
related facilities, such precision is not required. Selevan I, 584 F.3d at 97-98 ("We emphasize
that there need not be a perfect fit between the use of the [facilities] and the support of [facilities]
by the toll.") (quoting Bridgeport, 567 F.3d at 86); see also Alamo Rent-A-Car, Inc. v. SarasotaManatee Airport Auth., 906 F .2d 516, 520 (11th Cir. 1990).
Accordingly, the fair approximation prong of the Northwest Airlines test is met.
3. Whether Tolls Charged Are Excessive Compared to the Benefits Toll-Payers Receive
Under the excessiveness prong, the tolls collected may not exceed proper margins when
taking into consideration the benefits conferred. Selevan II, 711 F.3d at 260. Again, the
standard "simply requires reasonableness." !d. Janes is instructive here. 977 F. Supp. 2d at
340--42. In evaluating the excessiveness requirement, the court found that the "[d]efendants'
expert reports persuasively demonstrate[ d] that the tolls charged for use of the TBTA bridges,
used to strengthen the city's mass transit system, confer vast benefits enjoyed by all users of
32
New York City's integrated transportation system." Id. at 340-41. Those benefits included:
"attracting industry; attracting and retaining a talented workforce; attaining economic
productivity; and providing 'redundancy and resilience' for the region in the event of disasters
and crises." Id. The court explained that motorists using the bridges benefited from the
availability of other commuting options through a corresponding reduction in traffic and
concluded that the defendants had sufficiently demonstrated that motorists paying TBTA tolls
"benefit in fair relation to the fees or tolls they pay." Id. at 342. The court further noted that all
commuters benefitted from the existence of a "smoothly functioning mass transit system" and
explicitly rejected the argument that the benefits conferred "must redound lopsidedly to those
who pay that fee or toll." Id. at 341-42 (citing Molinari, 838 F. Supp. at 726).
Plaintiffs contend that notwithstanding the existence of an integrated transit system the
TBTA's tolls are excessive because they go to fund certain MTA facilities and programs, namely
Arts for Transit, the Student MetroCard program, MT A Bus, and the LIB, which do not confer
specific benefits to the payers of the TBTA tolls. See Pl. Mem. 17-21 (citing Bridgeport, 567
F.3d at 87). This argument suffers from two major deficiencies. First, Plaintiffs have failed to
establish that the challenged programs even received TBT A surpluses. Defendants concede that
the TBTA revenues are allocated, as required by statute, to NYCT A, LIRR, and MNR to provide
support for mass transit and commuter railways, see Def. Mem. 17-18, but Defendants also
submit testimony and documentation showing that no money from the TBTA went to support
Arts for Transit, the Student MetroCard program, MTA Bus, or the LIB. Johnson Tr. at 104-11,
136-37; Herzog Decl. Ex. 8 (Feb. 6, 2012 Staff Summary) at V-1-V-10. Plaintiffs have failed to
identify any evidence to the contrary. Money is, as Plaintiffs note, fungible, and the fact that
TBTA revenues are used to fund NYCT A mass transit and LIRR and MNR commuter railway
33
expenses may in fact enable the MT A to use other money to support these programs and
services. See Johnson Tr. at 102-04. However, in the absence of any evidence that TBTA toll
surpluses were actually used to support Arts for Transit, the Student MetroCard program, MT A
Bus, and the LIB, Defendants are under no obligation to ensure that each such program or
service benefits TBTA toll-paying motorists in proportion to the tolls paid. Unlike in
Bridgeport, 567 F.3d at 87, there is no evidence that tolls were actually going to support the
contested activities.
Second, even if Plaintiffs could demonstrate that TBTA surpluses were used in the
manner alleged, the TBTA's use of the tolls for these purposes would only be invalid if those
challenged facilities and programs did not functionally support the integrated transportation
system upon which the TBTA bridges and tunnels depend. Because Defendants have
demonstrated the existence of a functionally integrated transportation system, Plaintiffs'
particularized grievances as to Arts for Transit, the Student MetroCard program, MTA Bus, and
the LIB would not need to be considered individually even if those programs received TBTA
funds. This case is distinguishable from Bridgeport, 567 F.3d at 87, which did not involve a
functionally integrated transportation system, but rather involved discrete government services
found to bear no functional relationship to the ferry services paid for by ferry passengers.
Indeed, the Second Circuit in Bridgeport acknowledged that the very reason the district court
"had no choice but to make particularized inquiries as to the various [Bridgeport Port Authority]
expenditures" was that the authority's budget was supporting activities that were of no benefit to
ferry passengers. 567 F.3d at 87. That is not the case here.
The degree of precision demanded by Plaintiffs is not what the law requires. See e.g.,
Cohen, 775 F. Supp. 2d at 449-50; Janes, 977 F. Supp. 2d at 342. As discussed above, the
34
uncontested benefits that MTA' s functionally integrated transit system confers to TBTA tollpayers include reductions in traffic congestion on TBTA bridges and tunnels, along with
associated reductions in fuel costs, stress, auto emissions, and wait times, as well as the benefits
of agglomeration and improved access to the diverse economic markets and cultural attractions
ofNew York City. See also Moss Report 42-47; Small Report 20-21. Defendants have easily
met their burden, given that the TBT A toll surpluses in question primarily support mass transit
and commuter railroad services and Defendants' experts have thoroughly documented how these
services benefit motorists who use TBTA facilities. See id.
Plaintiffs also argue that it is unreasonable for TBTA toll-payers to bear the cost of
reduced traffic when all drivers in the region, even those who do not use the bridges and tunnels,
reap the benefits. A similar objection could be made with respect to the economic and cultural
benefits, which benefit TBTA toll-payers and non-customers alike. However, the fact that some
of the benefits that flow from the bridges and tunnels are available not only to TBTA customers
but to all those who drive or access the City's economic and cultural offerings is not itself
evidence that TBTA members did not benefit reasonably from their use of the bridges and
tunnels. The benefits that flow to non-customers do not diminish the benefits received by those
who pay the TBTA tolls. See Janes, 977 F. Supp. 2d at 342. Plaintiffs' remaining arguments are
without merit.
Accordingly, the Court finds that Defendants' toll policies satisfy the excessiveness
prong of the Northwest Airlines test. Therefore, Defendants' motion for summary judgment on
the right to travel and dormant Commerce Clause claims is GRANTED.
III.
State Claims
Plaintiffs assert related common-law claims under New York law for unjust enrichment
35
and money had and received in connection with the allegedly unconstitutional tolls charged by
Defendants. Under New York law, "[t]o prevail on a claim ofunjust enrichment, a Plaintiff must
establish (1) that the defendant benefitted; (2) at the Plaintiffs expense; and (3) that equity and
good conscience require restitution." Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield
ofNew Jersey, Inc., 448 F.3d 573, 586 (2d Cir. 2006) (quoting Kaye v. Grossman, 202 F.3d 611,
616 (2d Cir. 2000) (internal quotation marks omitted). To state a claim for money had and
received, a plaintiff must demonstrate that "(1) defendant received money belonging to plaintiff;
(2) defendant benefitted from the receipt of money; and (3) under principles of equity and good
conscience, defendant should not be permitted to keep the money." Aaron Ferer & Sons, Ltd., v.
Chase Manhattan Bank, NA., 731 F.2d 112, 125 (2d Cir. 1984); see also Onanuga v. Pfizer,
Inc., 369 F. Supp. 2d 491, 498 (S.D.N.Y. 2005).
Plaintiffs allege that Defendants "charged tolls, or caused the charging of tolls, to
Plaintiffs ... in an amount that Defendants were not legally entitled to, and by doing so
Defendants collected or received money belonging to Plaintiffs ... to which Defendants were
not entitled." Compl.
~
133. To establish a claim for either unjust enrichment or money had and
received, Plaintiffs must show some underlying reason in equity or good conscience that
Defendants are not entitled to the tolls charged. Plaintiffs did not address their state law claims
in their opposition and reply papers. Because Plaintiffs have failed to establish that Defendants'
tolls were unconstitutional or unlawful, summary judgment for Defendants is appropriate. See
Janes, 2013 WL 5630629, at *20 ("[B]oth the unjust enrichment and money had and received
claims are premised on a finding that the practices are unconstitutional or unlawful.").
Accordingly, Defendants' motion for summary judgment on Plaintiffs' state law claims is
GRANTED.
36
CONCLUSION
Defendants' motion for summary judgment is GRANTED. Plaintiffs' cross-motion is
DENIED. The Clerk of Court is instructed terminate the motions at ECF Nos. 58 and 75 and
close the case.
SO ORDERED.
Dated: September 16, 2014
New York, New York
ANALISA TORRES
United States District Judge
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